Ski areas and the Forest Service continue their legal tussle over water rights.

By Bob Berwyn

SUMMIT COUNTY — The U.S. Forest Service has responded to the ski industry’s lawsuit over water rights, claiming it has every legal right to attach certain requirements to ski area permits ensuring that the water originating in streams on public lands remain dedicated to continued ski area obligations.

In the response, the Forest Service said:

“The 2012 ski area water rights clause speaks for itself and is the best evidence of its contents. Defendants deny any allegations contrary to the plain language and meaning of the 2012 ski area water rights clause. Defendants deny any violation of the Constitution, federal law or regulation.”

The latest skirmish in the long-running water war started late last year when the agency inserted a new water rights clause into standard ski area permits. The clause replaced language developed in 2004 that gave ski areas more absolute control over the water. According to the Forest Service, the 2004 language could have enabled resorts to sell off some of their water rights. More background here.

The ski industry sees it differently. Testifying on behalf of the National Ski Areas Association, Boulder attorney Glenn Porzak last November told a congressional committee that the new clause is a takings, essentially forcing ski resorts to relinquish control of water rights worth tens of millions of dollars.

The NSAA subsequently challenged the agency in court, claiming that the Forest Service failed to provide an opportunity for public comment on the changes, and also that it didn’t analyze the economic impacts of the permit change.

The Forest Service response, filed last month, acknowledges that the agency adopted the rule without taking comment, but says that existing laws enable the agency to make certain administrative changes without public process. Similarly, the agency claimed it’s not required to do an economic analysis for certain administrative changes.

The case will likely hinge on the the court’s interpretation of the Administrative Procedures Act related previous case law, according to Mark Squillace, director of the University of Colorado Natural Resources Law Center.

Squillace said the Forest Service response was standard for this type of case and explained that the ski industry may have a case based on the Administrative Procedures Act, although some previous court rulings give the agency a lot of discretion under the act.

In some cases, plaintiffs must show that an action was “arbitrary and capricious.”

The Forest Service won’t comment on the matter right now, pending the outcome of the litigation, said regional spokesman Steve Segin. But late last year, the director of the agency’s recreation and heritage resources programs said the change is aimed at sustaining resorts operating under permit for the long-term by ensuring that the water rights stay with the ski area even if there is a change in ownership or some other unforeseen circumstance.

The value of ski areas is tied at least in part to the associated water rights, said Jim Bedwell.

“If there’s a change of ownership, the buyers will know they have continued ownership of the water rights, They can’t be parted out,” he said.

The new clause would clarify and define ownership of various water rights associated with permitted ski areas, he said, adding that the language in the 2004 clause was not legally viable because ownership of the water rights was not clearly defined.

The ski industry also recognizes that the value of their resorts is linked with those water rights. In fact, the lawsuit specifies that the resorts use those rights as assets on their balance sheets, and that any uncertainty regarding those rights could affect their credit.

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